Granted, Facebook is yesterday's news, or so I think, but it's such an interesting story nevertheless.

Think about it. The whole journey from zero to startup-stardom took only a couple of years. Exponential growth, excitement all around, Facebook has been the darling of web2.0 for a while. But as we all know it's not only about getting there. It's about staying alive and staying on the cutting edge. Facebook was on the bleeding edge for a while and now it's... not any more.

So is Facebook in a free fall? For one thing, the site has reached a plateau, actually it's probably losing users and at the very least, it looks like engagement is not as strong as it used to be. As users are getting tired of the myriads of applications, new applications are not as successful any more. After all, there so many of them that the marginal utility of a new application is diminishing (as we say in economics). This in turn means that developers have less of a motive to build for Facebook. We know what that means. Meanwhile, the site hasn't really figured out how to make money. So if and when they run out of cash, the old valuation of 15 billion will be tested again.

When I was studying marketing they use to teach us about the lifecycle of a product: introduction, growth maturity, decline. Somehow, the term lifecycle had a different meaning back then. Maybe its the word "life" that had connotations of a longer time.